Welcome to our August 2025 Employment Law Update!
In this edition, we break down the latest developments that could impact employers and HR teams. We cover new amendments to the Employment Rights Bill, significant changes for umbrella companies in labour supply chains, and a tribunal ruling that reinforces the boundaries of an employer’s duty to make reasonable adjustments.
Employment Rights Bill – Key updates
The Employment Rights Bill continues to take shape with a series of significant amendments that have recently been announced. These changes aim to refine key areas such as fire and re-hire, bereavement leave for pregnancy loss and agency worker pay rules.
Fire and Re-hire: New safeguards for employees
The government made more amendments to the fire and re-hire section of the Bill.
They are:
- A softening of the automatic dismissal provision for non-acceptance of contractual changes. Automatic dismissal will only apply if the employee has refused the ‘restricted variations’ the employer wishes to introduce. These variations cover pay and pensions; hours worked; and holidays as well as variation clauses allowing changes without the employee’s consent. The government is introducing a statutory checklist for employers (and Employment Tribunals, in the event of a claim) to check if dismissals made for refusing to accept non-restricted contractual terms are fair or not. These include the reason for the variation and an examination of the consultation undertaken.
- There are ‘exception provisions’ for the public sector: in the case of local authorities, immediate financial difficulties affecting the financial sustainability of carrying out the employer’s statutory functions, where a “relevant intervention direction” relating to financial management of a local authority applies. For other public sector employers, they must show financial difficulties which “affect the financial sustainability of carrying out the employer’s statutory functions”.
There will be a consultation in the autumn on the regulations supporting the fire and re-hire provisions, but the scope has not been announced.
Bereavement leave for pregnancy loss
A new statutory, day-one right to a minimum of a week’s unpaid leave for both parents in the event of pregnancy loss before 24 weeks is being introduced. Pregnancy loss has been defined very broadly as “the ending of a pregnancy after less than twenty-four weeks of pregnancy in any way other than by a live birth” and expressly covers IVF failure. A consultation will take place in the autumn on the length of the proposed leave and the documentary evidence employers may ask for. According to the Employment Rights Bill roadmap, this will take effect in 2027 so employers have time to consider and update their relevant policies and training programmes for managers.
Agency workers: Pay alignment rules
The government has proposed further amendments relating to agency workers’ pay, namely that their pay should either match the highest level of pay that a worker has received during the 12-week reference period unless it can be objectively justified that a lower rate of pay is a ‘proportionate means of achieving a legitimate aim.’
Umbrella companies: non-compliance
The government has published draft legislation to be included in the Finance Bill 2025/26, whereby recruitment agencies or end clients are jointly responsible for paying PAYE and NIC for workers supplied through umbrella companies in a labour supply chain. The imposition of the IR35 rules in the private sector in 2021 led to workers abandoning the personal service company model in favour of direct employment by an umbrella company that, acting as their employer, became responsible for PAYE and NIC. HMRC believes that too many of these companies are being used to facilitate tax avoidance, hence the move. Clients should identify any umbrella companies used in their supply chains and check if they are members of a reputable industry body. If not, they should review their contractual obligations as soon as possible as this legislation is scheduled for April 2026.
Case update
Claim that NHS Trust failed to make reasonable adjustments in dismissal case rejected
We regularly remind readers of the importance of following dismissal procedures correctly and fairly. When unfair dismissal claims succeed, it is often due to procedural error rather than blatant unfairness. This particular case, Hindmarch v North East Ambulance NHS Trust, is a textbook example of how the employer got each step right in a tricky case involving the dismissal of an ambulance worker.
Mr Hindmarch, who worked for the North-East Ambulance NHS Foundation Trust as a non-emergency ambulance driver, claimed that the Trust had failed to make reasonable adjustments by issuing him with a FFP2 standard surgical face mask rather than the higher FFP3 standard face mask issued to emergency ambulance drivers.
He suffered from extreme anxiety and was especially worried about catching Covid from Covid-positive patients. After returning to work after shielding during the first lockdown in 2020, he refused to drive an ambulance unless provided with a FFP3 face mask (designed for those carrying out first aid and resuscitation procedures, which did not apply to Mr Hindmarch). He was eventually signed off work on a long-term basis and referred to Occupational Health (OH). His mental health deteriorated to the point where he was unable to leave the house.
He submitted a grievance relating to the Trust’s failure to give him a FFP3 mask (even though he was unsure whether this would enable him to return to work). The Trust sought guidance from OH and their risk department, and the management team also met to consider Mr Hindmarch’s position. It was concluded that, in line with national guidance, a FFP3 face mask was inappropriate for Mr Hindmarch’s role, not least as a FFP3 mask is only to be used for short periods, and not for a full shift or for extended periods of driving. If an FFP3 mask were to be used over longer period, this was impractical as they require regular decontamination. Furthermore, the FFP3 mask does not give 100% protection against Covid which was particularly the case for Mr Hindmarch as the seal on the mask would be impeded by his beard. Mr Hindmarch couldn’t attend any of the grievance outcome meetings due to severe psychological problems and other medical issues. In the meantime, he refused alternative duties and refused to attend meetings either face to face or via telephone.
In early 2022, Mr Hindmarch lodged a claim in the ET for the Trust’s failure to make reasonable adjustments and unfair dismissal. Following two further OH reviews and four sickness absence reviews, his employment was terminated on the grounds of ill health. The ET found that, although he was disabled under the Equality Act 2010, with a mental impairment lasting more than 12 months, it agreed with the Trust’s position that, even if it had provided Mr Hindmarch with a FFP3 mask, it is unlikely that it would have allayed his anxieties sufficiently to enable him to return to work as his fear of catching Covid was so deep-seated. The judge noted that the Trust was only obliged to make a reasonable adjustment if its provision had a real prospect of removing the disadvantage. His anxiety was such that there was no prospect of this being the case and that, even if the FFP3 mask had been provided, it would not have guaranteed Mr Hindmarch’s return to work. The ET accepted the Trust’s explanation of why a FF3P mask was inappropriate and ruled in their favour. In relation to unfair dismissal, the ET accepted that the Trust had weighed up the impact of Mr Hindmarsh’s prolonged absence against its contractual duty to transfer patients in a timely manner and therefore that the dismissal was justified.
Mr Hindmarch appealed the decision but the EAT dismissed all five grounds of appeal. At appeal, the judge noted: “This was no more than common sense. The ET’s judgment in this case was impressively thorough, well-reasoned, and clear. There was no misdirection.”
Employers can fall into the trap of assuming that all adjustments requested by an employee must be provided. This case is a useful reminder that an employer is not obliged to make a reasonable adjustment if there is no prospect of it either avoiding or reducing the disadvantage. The duty to make reasonable adjustments is grounded in the idea of levelling up any disadvantage which a disabled employee faces compared to someone who does not share that disability. If there is no evidence that a particular adjustment will achieve that aim then, as this case illustrates, Tribunals will support a decision not to provide it. It also demonstrates the importance of following the correct procedures and policies to the letter to avoid an otherwise reasonable case being dismissed for a procedural error.
The information provided in this article is provided for general information purposes only, and does not provide definitive advice. It does not amount to legal or other professional advice and so you should not rely on any information contained here as if it were such advice.
Wright Hassall does not accept any responsibility for any loss which may arise from reliance on any information published here. Definitive advice can only be given with full knowledge of all relevant facts. If you need such advice please contact a member of our professional staff.
The information published across our Knowledge Base is correct at the time of going to press.
